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Rupee at over 6-month low

business Updated: Aug 18, 2011 22:54 IST

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The rupee on Thursday shed a hefty 33 paise to end at a six-and-a-half month low of 45.74/75, against the US currency due to sustained dollar demand amid a a steep fall in equity markets.

Dealers in foreign exchange said a smart rise in dollar value in the overseas market on good demand after heavy selloff in global equities dampened the rupee sentiment.

At the Interbank Foreign Exchange (Forex) market, the local unit opened lower at 45.47/48 a dollar.

It ended the day at 45.74/75, a steep fall of 0.72% or 33 paise from the previous day's close, in the third straight session of loss.

The dollar index was up by 0.4% against its major six rivals in European market today.

Meanwhile, the Bombay Stock Exchange benchmark Sensex today plunged by 371 poinits or 2.20% to end at nearly 15-month low, which mainly affected the market sentiment. All Asian stocks too ended weak.

Alpari Financial Services (India) CEO Pramit Brahmbhatt said: "Indian equity markets traded weak throughout the day and was down by over 2% which depreciated the rupee by over 0.7%. Dollar demand from oil importers also helped dollar to gain against the rupee."

India Forex Advisors CEO Abhishek Goenka said the dollar demand from oil importers intensified amid a weakness in major Asian currencies.

"As soon as the pending oil demand to Iran is settled, the rupee can show slight appreciation. However, till then there will be a robust dollar demand in the market and we can target 45.90 and above levels in the USD/INR pair," he added.

Meanwhile, FIIs withdrew USD 225.46 million in three sessions since August 12 from equities. New York crude oil was trading below USD 86 a barrel in London today.

The rupee premium for the forward dollar declined further on sustained receivings by exporters. The benchmark six-month forward dollar premium payable in January fell to 58-62 paise from 64-1/2-67-1/2 paise on Wednesday.

Far-forward contracts maturing in July also dropped to 125-129 paise from 135-138 paise previously.

The RBI fixed the reference rate for the dollar at Rs 45.6105 and the euro at Rs 65.6845.

The rupee rebounded against the pound sterling to settle at Rs 75.42/44 from Wednesday's close of Rs 74.69/71 and also recovered to Rs 65.72/74 per euro from Rs 65.78/80 previously.

It moved down further against the Japanese yen to Rs 59.72/74 per 100 yen from last close of Rs 59.34/36.

NOTE: The Forex and Money market will remain closed tomorrow, August 19, for observing "PATETI".